Circular to Capital Markets Services Licence Holders

20 March 2020

To Capital Markets Services Licence Holders -

The Securities Commission Malaysia (“SC”) recognises the constraints and challenges faced by licensed intermediaries in complying with the timelines for certain regulatory requirements, following the implementation of the Movement Control Order from 18 to 31 March 2020 by the Government (“MCO”).

Given such, the SC is according flexibilities to licensed persons in complying with the specific requirements below: 
  • Training Requirements
    1. Five training days per year by Trading Representatives (“TRs”) and Marketing Representatives (“MRs”)
      • Paragraph 7.05 of the Guidelines for Marketing Representatives (“Guidelines”) requires a Capital Markets Services Licence (“CMSL”) holder, acting as a Principal, to supervise its MR ensuring that training requirements as specified in the Guidelines are satisfied. This training must be relevant to the MRs’ function and be conducted over a minimum of five days annually.
      • TRs and MRs whose anniversary dates fall in March-May 2020 are given until 30 June 2020 to fulfil this requirement. Principals are to report to the SC via letter on the compliance status of the TRs accordingly. 
    2. Capital Market Director Programme (“CMDP”)
      • Paragraphs 4.02(15) and (16) of the Licensing Handbook requires newly appointed directors of CMSL holders for dealing in securities, dealing in derivatives and fund management in relation to portfolio management to complete the CMDP within six months from the date of their appointment. 
      • Newly appointed directors whose deadline to conclude the CMDP falls in March-May 2020 are given until 30 June 2020 to fulfil this requirement.
  • Report Submissions to the SC
    1. Auditor’s Report and Audited Financial Statements
      • Section 127 of the Capital Markets and Services Act 2007 requires the submission of auditor’s report within three months after the close of each financial year. 
      • CMSL holders whose financial year end falls in December 2019 - February 2020 are given until 30 June 2020 to lodge their auditor’s report via the Electronic Licensing Application (ELA) system. This also applies to the submission of audited financial statements via the SC Common Reporting Platform (ComRep). 
    2. Anniversary Reporting for Authorisation of Activity (“ARAA”)
      • Paragraph 6.05 of the Licensing Handbook requires the ARAA report to be submitted within seven business days before the anniversary date. 
      • CMSL holders whose anniversary date fall in March-May 2020 are given until 30 June 2020 to submit their ARAA report.
  • Appointment of Key Management
    • Paragraph 4.06(5) of the Licensing Handbook requires a CMSL holder take the necessary steps to recruit new key management personnel or compliance officer within three months from the date of vacancy.
    • For vacancies that must be filled by March 2020 but their appointments are delayed due to cancellations or postponements of the SC Licensing Examinations (“SCLE”) or circumstances arising from the MCO, an extension of time is granted until 30 June 2020.
  • Recruitment of New Capital Markets Services Representative’s Licence (“CMSRL”) Holder
    • Paragraph 4.02(30) of the Licensing Handbook requires a CMSL holder to have at least two CMSRL holders for each regulated activity. Once this minimum requirement cannot be met, CMSL holders must take immediate steps to recruit a new candidate.
    • In the event that a recruitment is delayed due to cancellations or postponements of the SCLE or circumstances arising from the MCO, an extension of time is granted until 30 June 2020.
  • Submission of Monthly Fund Management Company (“FMC”) Report
    • Paragraph 4.04(p) of the Guidelines on Compliance Function for Fund Management Companies, read together with Paragraph 1.5 of the Fund Management and Unit Trust Companies Reporting Manual, requires submission of the Monthly FMC Report within seven business days (by 5.00 pm) after month-end reporting date. The timeline for the submission of the report due in March 2020 is extended to 30 April 2020.
  • Submission of Annual, Interim and Quarterly Reports for Unit Trust Funds, Wholesale Funds and Funds under Private Retirement Scheme
    • Paragraphs 12.07(c) and (d) of the Guidelines on Unit Trust Funds requires a management company to send the interim report of unit trust funds to unit holders and deliver a copy to the SC within two months after the end of the period the report covers.
    • Section B, Part 1, Paragraph 4.17 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires a fund management company or the representative to send the annual report of wholesale funds to unit holders and deliver a copy to the SC within two months after the end of the period the report covers.
    • Section B, Part 1, Paragraph 4.17 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires a fund management company or the representative to send the quarterly report of wholesale funds to unit holders within two months after the end of the period the report covers.
    • Paragraph 12.07(b), (c) and (d) of the Guidelines on Private Retirement Schemes requires a PRS provider to send the interim report of funds under private retirement scheme to unit holders and the Private Pension Administrator as well as to deliver a copy to the SC within two months after the end of the period the report covers.
    • The interim reports of unit trust funds and interim reports of funds under private retirement scheme with financial period ended 31 January 2020 are given until 30 April 2020 to submit the reports to the SC and send to the unit holders as well as the Private Pension Administrator thereof.
    • The quarterly reports and annual reports of wholesale funds with financial period or year ended 31 January 2020 are given until 30 April 2020 to submit the reports to the unit holders and the SC, where applicable.
    • Annual reports of unit trust funds and annual reports of funds under private retirement scheme with financial year ended 31 January 2020 is required to be submitted to the SC, unit holders and the Private Pension Administrator under the Capital Markets and Services Act 2007 and the Capital Markets & Services (Private Retirement Scheme Industry) Regulations 2012 respectively by 31 March 2020. Relief is granted by SC from complying with this deadline subject that the annual reports are to be submitted no later than 30 April 2020. Management companies and PRS Providers that are facing challenges during this period are encouraged to keep their unitholders and members updated.
  • Submission of Monthly Statistical Returns and Monthly PRS Returns
    • Paragraph (13)(a), Schedule G of the Guidelines on Unit Trust Funds requires the statistical returns of unit trust funds to be submitted within seven business days of the month following the month of reporting.
    • Section B, Part 1, Paragraph 4.17 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires the statistical returns of wholesale funds to be submitted within seven business days of the month following the month of reporting.
    • Paragraph (9), Schedule G of the Guidelines on Private Retirement Schemes requires the PRS returns of funds under private retirement scheme to be submitted within seven business days of the month following the month of reporting.
    • Paragraph 10.07 of the Guidelines for the Offering, Marketing and Distribution of Foreign Funds requires the statistical returns of a qualifying collective investment scheme to be submitted within seven business days of the month following the month of reporting.
    • For monthly statistical returns and monthly PRS returns due for the month of March 2020, the timeline for the submission of returns are extended to 30 April 2020.
  • Submission of Quarterly ETF Returns and Quarterly REIT Returns
    • Paragraph 20.06 of the Guidelines on Exchange-Traded Fund requires the ETF returns of an exchange-traded fund to be submitted within seven business days of the quarter following the end of the period of reporting.
    • Paragraph 22.06 of the Guidelines on Listed Real Estate Investment Trusts requires the REIT returns of a listed REIT to be submitted within seven business days of the quarter following the end of the period of reporting.
    • Paragraph (8), Schedule E of the Guidelines on Real Estate Investment Trusts requires the REIT returns of an unlisted REIT to be submitted within seven business days of the quarter following the end of the period of reporting.
    • For quarterly ETF returns and quarterly REIT returns due for first quarter of 2020, the timeline for the submission of returns are extended to 30 April 2020.
  • Submission of Monthly Compliance Returns and Monthly Investment Returns
    • Paragraph (13)(b), Schedule G of the Guidelines on Unit Trust Funds requires the compliance returns to be submitted within fourteen business day of the month following the month of reporting.
    • Section B, Part 1, Paragraph 4.17 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires the investment returns of wholesale funds to be submitted within fourteen business days of the month following the month of reporting.
    • For monthly compliance returns and monthly investment returns due for the month of March 2020, the timeline for the submission of returns are extended to 30 April 2020.
  • Submissions / Notifications to the SC under the Lodge and Launch Framework for Corporate Bonds and Sukuk
    1. Implementation time frame for issuance
      • Section B, Part 3, Paragraph 4.05 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that all corporate bonds or sukuk must be issued within 60 business days from the date of lodgement.
      • Section B, Part 3, Paragraph 4.06 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that in the case of a debt or sukuk programme, only the first issuance under the programme would be required to be issued within 60 business days from the date of lodgement.
      • For any lodgements made to the SC between 1 March 2020 and 30 April 2020, extension of time is granted for one-off issuance and the first issuance under a programme to take place within 90 business days from the date of lodgement.
    2. Post-issuance notice
      • Section B, Part 3, Paragraph 4.07 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that for all issuances of corporate bonds or sukuk, an issuer must submit a post-issuance notice to the SC within seven business days from the date of issuance.
      • For any post-issuance notices due between 1 March 2020 and 30 April 2020, extension of time is granted for the post-issuance notice to be submitted to the SC within 30 calendar days from the date of issuance.
    3. Redemption notice 
      • Section B, Part 3, Paragraph 5.08 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that where the corporate bonds or sukuk has been redeemed, whether in part or in full, the issuer must notify the SC within seven business days from the date of redemption.
      • For any redemption notices due between 1 March 2020 and 30 April 2020, extension of time is granted for the redemption notice to be submitted to the SC within 30 calendar days from the date of redemption.
    4. Post-issuance revision
      • Section B, Part 3, Paragraph 6.06 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that the issuer must update the SC of any revision to the principal terms and conditions after issuance through its Lodgement Party within 14 business days after the proposed revision comes into effect.
      • For any notifications on post-issuance revisions due between 1 March 2020 and 30 April 2020, extension of time is granted for notification on the post-issuance revision to be submitted to the SC within 30 calendar days after the proposed revision comes into effect.
      • Section B, Part 3, Paragraph 6.08(e) of of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that where consent from bondholders or sukukholders is required for any proposed revision to the principal terms and conditions, the principal adviser must ensure that the announcements as per subparagraphs 6.08(c) or (d), as the case may be, are copied to the SC within two business days from the date of the announcements.
      • For any submission of copies of announcements on post-issuance revision due between 1 March 2020 and 30 April 2020, extension of time is granted for the copies of announcements to be submitted to the SC within 30 calendar days from the date of the announcements.
    5. Upsizing of a debt or sukuk programme
      • Section B, Part 3, Paragraph 6.14(e) of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires that where consent from bondholders or sukukholders is required for any proposed upsizing, the principal adviser must ensure that the announcements as per subparagraphs 6.14(c) or (d), as the case may be, are copied to the SC within two business days from the date of the announcements.
      • For any submission of copies of announcements on the upsizing of a debt or sukuk programme due between 1 March 2020 and 30 April 2020, extension of time is granted for the copies of announcements to be submitted to the SC within 30 calendar days from the date of the announcements.
  • Submission of Monthly Post-Issuance Report for Structured Products
    • Section B, Part 2, Paragraph 4.06 of the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework requires issuers to submit the monthly post-issuance report under paragraph 4.05 no later than seven business days after the end of every month.
    • Issuers are given an extension of time until 30 April 2020 to submit the March 2020 post issuance report. 
  • Application for Certification of Islamic Funds in Respect of Tax Incentives for the Islamic Fund Management Industry
    • In addition to the deferment flexibilities accorded above, for purpose of ensuring continuous assessment on all applications for certification of Islamic funds in respect of tax incentives for the Islamic fund management industry (“Certification”), all management companies managing Islamic funds are required to submit the application for the Certification via email in the following manner:
      1. Documents must be in a text searchable Portable Document Format (“PDF”);
      2. The PDF-text files must be in a readable and proper condition; and
      3. In a size of up to 10 MB per email to [email protected].
    • The submission of hard copies of the application continues to apply.
The deferment of these regulatory submissions is part of the SC’s wider relief package for the capital market in support of the government’s measures to contain the spread of COVID-19.

Notwithstanding the above extensions and flexibilities, the SC expects that any exceptional matters be promptly reported.
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